Secure PEDs are used in connection with Point of Sale (POS) devices, ATMS, or computers for performing secure PIN entry requiring electronic transactions. These transactions are typically payment transactions or secure information exchange. The function of the PEDs is to prevent third parties from tampering with the above mentioned transaction devices in an attempt to steal the PIN from consumers who use them. PEDs must go through a certification process administered by local or global certification authorities. In order for the PEDs to pass the certification process they must meet certain security standards including secure storage of public/private keys provided from acquiring banks and processors for encryption and authentication. The PEDs must also have the ability to deter tampering with the device, i.e., be “Tamper Resistant”, “Tamper Evident”, and “Tamper Responsive”. A device is “Tamper Resistant” if it prevents easy access to the PED and does not allow third parties to intercept the key strokes and steal the customer's PINs. A device is “Tamper Evident” if it becomes very apparent to the user when the device has been tampered with. A device is “Tamper Responsive” if in case someone attempts to tamper with the PED, the secure data of the PED that are used for the transactions get automatically erased from the memory thereby making the device useless for secure transactions. In one example, the certification requirements for the PEDs are described in the Payment Card Industry (PCI) PED specification, published on the Visa International website http://international.visa.com/fb/vendors/pin/reference.jsp. A secure PED must be certified by the appropriate authorities approved by Visa and MasterCard and once it has passed certification according to specifications and test, the device name is published as “certified.” A secure PED may be a stand-alone device or it may be integrated with the transaction device, as is the case for POS and ATM. However, most PEDs have a rectangular, box-like form and are usually large compared to typical mobile phone devices.
A mobile phone device is defined by its functionality and “form factor”. The main function of a mobile phone is to make phone calls in a mobile environment. Accordingly, a mobile phone or phone module includes hardware and software components that provide voice and data functionality over a wireless network. Today there are simple low cost mobile phones that perform just phone calls. There are also more expensive mobile phones that come with different ancillary features like digital cameras, PDA features, SMS, MMS, music, games, email, video streaming, among others. However, the core function of a mobile phone is simply its ability to make phone calls and if this function is removed the device is not a mobile phone anymore. Conversely if there is phone capability and any of the other ancillary features are removed, the device would still be a mobile phone. However, having the ability to make a phone calls in mobile environments alone does not make a device a “mobile phone”.
Another important characteristic that defines a mobile phone is its “form factor”, i.e., the look and feel of the device. Mobile phones come in several different physical styles or “form factors”. While manufacturers are continually coming up with new types of designs, there are several common categories used to describe form factors of mobile phones:                i) Bar: (candy-bar or block) This is the most basic style. The entire phone is one solid monolith, with no moving parts aside from the buttons and possibly antenna.        ii) Clamshell: (folder) This type of phone consists of two halves, connected by a hinge. The phone folds closed when not in use. The top half usually contains the speaker, and the display or battery, with the bottom half containing the keypad and remaining components Most clamshell phones have a feature called Active Flip, which means that calls can be answered and ended by simply opening and closing the phone.        iii) Flip: This type of phone is a cross between the Bar and Clamshell types. Most of the components of the phone are in one part, but a thin “flip” part covers the keypad and/or display when not in use. The flip may be all plastic, or it may contain one or two minor components such as a speaker or secondary keys. Most flip phones also feature Active Flip, as described above.        iv) Slide: This type is usually designed similarly to a clamshell, with a large main display and speaker in one half, and the keypad and battery in the other half. But the two halves slide open instead of using a hinge. Slide designs allow the main display to be seen when closed, and are generally easier to open and close one-handed.        
All these mobile phone designs are recognized as mobile phones and have the following common features. They are small enough so as to fit in a person's hand. Typical dimensions are in the range of 2-8 inches length and 1.5-3 inches width. They have a shape such that one can put the mobile phone up to his ear to listen and at the same time close to his mouth to talk. They have low weight. The weight is in the range of 4-9 ounces. If the device is larger or smaller it acquires another recognizable form factor. For example, a PC or a laptop can perform mobile phone functions when one plugs a radio module into it, but it still has the form factor of a PC or a laptop. The same is true with Tablet PC, or even a POS device that can perform mobile phone functions like a Lipman8000 mobile POS which can also dial a phone call, nonetheless it is still has a POS form factor and not a mobile phone form factor. Today's convergence of PDAs and mobile phones is still considered by the general public as having the form factor of a mobile phone because of size, shape and weight. These PDA-mobile phone devices are sized to fit into one's hand and one can hold them up close to his ears to listen and at the same time close to his mouth to talk in a way similar to how the average person would consider using a mobile phone. A larger size or a smaller size than that would start turning the mobile phone into a different form factor. For example one day when mobile phone capabilities are inserted into a wristwatch, that form factor will no longer be a mobile phone form factor, but it would be the form factor of a wristwatch. Thus form factor is important for defining a mobile phone.
Mobile phones have been combined with card readers to provide a new range of POS type terminals for conducting financial services transactions. While there are several card readers available today for mobile phones, offered by Semtek, Symbol, Apriva, none of these devices meet the PED security certification requirements. Most of these prior art devices are focused on the credit card market and are not designed for conducting debit card transaction where PIN entry is required. The keypads on the mobile phones are not secure and have not been approved or certified by major financial institutions. Accordingly, the current mobile phone-card reader combination devices do not meet the security requirements and cannot be certified for PIN entry requiring transactions.
Prior art POS devices with a certified PED have used a phone as an external modem for providing communications, similar to the way personal computers use a phone as an external modem for providing communications. However this is not a certified PED “integrated” with the phone as one device, but rather a POS that links to a phone. All these prior art POS devices function as standalone POS that link to other communication mediums, such as cable modems, DSL modems, or other dialup terminals, independent of the phone and thus are not considered to be an integrated unit with the phone. Furthermore, these devices do not have the form factor of a mobile phone. There are also prior art POS with a certified PED that use a wireless modem. However, these are wireless POS devices, and not a wireless mobile phone-POS with an “integrated” secure PED. Also, these devices do not have the form factor of a mobile device. Some of the wireless POS allow one to plug a separate microphone headset to dial a phone call, but it is still a POS and has the form factor of a POS and one would not consider it a mobile phone.
Accordingly, there is a need for a secure PED module that is certified by the various financial institutions and can be integrated with a mobile phone as one device to provide the small and convenient form factor and functionality of a mobile phone, while having the capabilities of a secure PED to enable POS various payment transactions including debit, and EMV.